Your Social Security
Just a short message today, but very pertinent
– I received an email regarding our Social Security, quite a while ago. I didn’t want to share it with anyone until I had a chance to check the math. So, I put it in a file and just thought about it again today – did the math, and it does check out real closely.
The email reinforces the fact that we have paid for our Social Security check that comes every month – it came out of our paychecks, and has been earning interest since day one. You may find it interesting too:
“Remember, not only did you contribute to Social Security, but your employer did, too. It totaled 15% of your income before taxes.
“If your wages averaged $30K yearly, over your working life, that’s close to $220,500 that was put into the Government’s Social Security “pot”, supposedly so you could be secure and comfortable in your retirement years.
“If you calculate the future value of $4,500 per year (yours & your employer’s contribution) at a simple 5% (less than what the government pays on the money that it borrows), after 49 years of working you’d have $892,919.98.
“If you withdraw only 3% per year, you will receive $26,787.60 per year and it will last more than 30 years (until you’re 95, if you retire at age 65), and that’s with no interest paid on that final amount on deposit!”
So, while Dick and I are very glad to receive our Social Security, why shouldn’t we?!
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Barbie Parks is the publisher and editor of MoneySavingMexico.com. She is the author of Retire In Luxury: How To Retire Abroad And Live Better on Less and her latest book, Money Saving Mexico: How To Save Money On Everything South of the Border.